30/6/2010 - The current market sentiment

The lower than expected demand for l31.9 billion euros on the ECB program financing program for 3 month has helped the market which was worried about the long term debt refinancing in Europe after the earlier released report of the ECB which highlighted the need of 800 billion euros by the end of 2012 suggesting that the European banks are in need to be ready for facing bad loans following the debt crisis which can reach 123 billion euros for 2010 and 2011 to reach 105 for 2011 and for facing the bad loans from 2007 till 2009 they should be ready with 238 billion euros. The single currency could reach 1.23 versus the greenback with the gained back confidence after the news before easing again by the release of June US ADP Employment which is expected to be up by just 59k from 55k in May. The greenback was well-supported yesterday with the market worries about the growth pace easing is US persisting containing the market sentiment ensured by the disappointing release of US consumer confidence of June which slumped below to 52.9 while the market was waiting for 62.9.
The Single next main resistance should be again at 1.2452 after failing to hold above it in the beginning of last week and then 1.2598 then 1.2685 which was the recorded previous high of last May and from it the pair fell breaking 1.2143 while the next support should be at 1.2165 then 1.2044 whereas it has found support yesterday and 1.1954 which was the pair low after falling from 1.2073 and it could protect the pair from making a newer low again below 1.1875 which has become the pair main defending line before 1.16 whereas the pair has started its rally to 1.604 before falling again to 1.233 amid the credit crisis and rising back forming a lower high at 1.515 in the beginning of last December to ease back to the current levels on the pressure on the debt crisis which has been started in Greece attracting the market focusing.

The worries about the growth pace in US have started to emerge last week with the release of the disappointing new home sales of May which were waited to be 470k from 507k in April but they have shocked the market with just 300k falling by 32.7 encouraging the investors to settle their taken risks supporting the greenback and weighing negatively on the equities market which were exposed to selling by the release of this week important data which can affirm the growth easing worries which have been highlighted in the recent Fed's assessment last week when it has decided to keep the interest rate unchanged at nearly 0% maintaining its same cautious stance worrying about the current growth pace which is getting out of stream and the debt crisis of Europe consequences negative impact on US which forced Obama to request from his European partner to keep their easing steps worrying about the growth down side risks from withdrawing their stimulation measures which have become threat to their financial systems and creditability itself recently forcing them to have their debt risks at the top of their priorities currently relying on what has been achieved after the credit crisis after they had started capping the governmental spending and taking austerity measures and further imposed taxes on the banks after adopting massive easing steps in the face of the credit crisis for bailing out their economies out of the recession which caused a rapid deterioration of their financial position in the recent years after the credit crisis.

By God's Will, it is important to wait today for June US ADP Employment to be 59k from 55k in May as a key of the release of US non-farm payroll of June which is expected to be to lose 100k after adding 431k in May and we have also today the release of June US Chicago PMI which is waited to be 59.5 from 59.7 in MAY as it is considering a key of tomorrow ISM manufacturing index which is waited to come out tomorrow and is forecasted to be 59 from 59.7 in May.